Floater market ‘recovery’

The floating production market has started to experience a recovery, according to the latest research from US consultancy Energy Maritime Associates (EMA), which forecast that about $86 billion will be spent in the sector over the next five years.

EMA said that between 83 and 168 floating production systems will be required, with a mid-case forecast of $86 billion being spent on 119 units.

EMA’s findings came in its 2017 to 2021 Floating Production Systems Outlook report, covering all types of vessels — floating production, storage and offloading, floating liquefied natural gas, floating storage and regasification, tension-leg platforms, spars, semi-submersibles and floating storage and offloading.

“Given the early signs of a recovery, the outlook has been revised slightly from last year, with 10% more FPSOs, FSRUs, and production semisubs expected in the mid-case scenario,” EMA said.

“However, fewer FLNGs are projected due to an excess supply of LNG expected to last through at least 2020, and lack of interest in new mega-projects. Prelude-sized FLNG units are not expected in the next five years, except perhaps one unit in the high case scenario.”

FPSOs are predicted to remain the most important floater solution, said EMA, accounting for almost 40% of orders and 65% of capital expenditure.

The consultancy warned, however, that more than half of the 61 units to be idled over the next two or three years will be scrapped, with others laid-up for years before finding work.

“When it comes to idle assets, some contractors will be willing to accept more flexible commercial arrangements, including field equity and/or payment linked to oil prices and production,” said EMA’s report. 

“We view this as the beginning of a recovery, albeit a gradual one,” said EMA’s managing director David Boggs.